What was the context in which Green Plains came to life and what is the core vision of the company?
Green Plains was founded about 17 years ago as a generation one ethanol producer. The industry was established to reduce transportation emissions, and take share from fossil fuels which had a global monopoly. We built the company on the thesis that the world is going to accept low carbon fuels. However, we saw significant backlash from established oil and refining companies, ethanol being perceived as a threat to the old establishment. Ultimately, we continued to fight the battle our way and we got support from agriculture and retail.
A single kernel of corn can have three uses: starch - which is turned into sugar, alcohol and then ethanol; fiber - which becomes animal feed; and CO2 - which is 99,5% pure carbon that the corn plant needs to grow. All these processes result in a closed loop system where ethanol reduces tailpipe emissions by 46%. Although we increased our cleanliness relative to gasoline to make our product even more renewable, only 10% of the fuel tank in the US is comprised of ethanol, while in Brazil the ratio is three times more. The intersection of agriculture and energy is the only pathway towards decarbonizing fuel and we sit at this intersection together, with support from the inflation reduction act to incentivize renewable jet fuel and other such innovations.
At the moment, after you've grown to a certain size, what are the greatest challenges that you're facing?
We are still battling for our share because the US consumer is locked in a monopoly in the fuel tank and they don't have a real choice when they pull up to the pump. The big oil companies have a much bigger lobby than we do and every time we make a few steps forward, we are pushed back, but today (especially with the IRA act) there is an increasing understanding of the importance of the emissions reductions we deliver.
As the US increasingly focuses on sustainable aviation fuels, ethanol will become an indispensable element and we are sure that eventually we will receive a more significant share of the fuel tank.
How do you see biofuels evolving as electrification increases?
We still have over 250 million internal combustion engine cars in the US alone, the ratio being of 2% EVs against 98% ICE cars, so it is going to take a long while to turn the fleet. The world will probably realize that replacing internal combustion engine cars with coal-based power that makes electricity is not exactly an evolution. It is true that electric vehicles have already impacted the gas demand in the United States, but modern cars tend to remain drivable and reliable for a longer time so shifting towards EVs is definitely not going to happen overnight. My personal prediction is that over the next ten years they will probably continue to get more market share if they can manage to get their prices down.
Can you, please, share with us the approach Green Plains has when it comes to carbon sequestering?
We work with biogenic carbon which is extremely easy to handle. The first step to cut our carbon score in half is to collect it through pipelines and put it into geological formations. This is the easiest and quickest way to decarbonize as a starting point since a six-inch pipeline can sequester tens of millions of tons of carbon and there are already 40,000 miles of gas and oil pipes underground. An ethanol plant is at or around a 60-point carbon intensity (CI) score while gasoline is around 90 CI.
The other half of that CI that remains usually sits on the farm so we have to help farmers decarbonize and now with the help of the inflation reduction act every point of carbon reduction has an associated value. This program facilitates the use of combined heat and power, biomass boilers and renewable natural gas, so by simply investing in carbon reduction technologies at our biorefineries, another 20 to 30 carbon points can be reduced. As a collateral result, the byproducts (proteins, oil, sugar, bioplastics, etc.) will have a lower carbon intensity thanks to technologies that convert traditional ethanol plants into modern-day biorefineries.
What milestones would you like to achieve in the following two to three years?
We were one of the pioneers of ESG in our industry, so our future plan is to continue on the path of sustainability by reducing our natural gas, electricity and water consumption. Potentially, we could reduce our greenhouse emissions by 50% by 2030 and reach the net zero in operations target by 2050. What we can do in a biorefinery today, relative to 15 years ago, is truly transformational.
Do you have a final message for our international readership?
The opportunity is ripe and we have to move quickly because the winds change and adversity can swiftly turn into opportunity.
At the same time, we have to be realistic of the green transition development, and not overpromise, because although we are part of the solution, going all the way to one side will not assure victory. There has to be a unanimously accepted middle-ground where the old economy is mixed with the new economy, for a more balanced and solid result.
